611.6731/112
The Ambassador in Turkey (Grew) to the Secretary of State
[Received September 28.]
Sir: I have the honor to refer to my despatch No. 397 of July 25, and to the Department’s telegraphic reply No. 71 of August 21, 10 a.m.,39 stating that the Department would be glad to receive by mail a detailed statement of my recommendations with regard to my taking up with the Turkish Government the question of amending the provisions of Article I of the law of April 10, 1927, or of enacting other legislation which would permit the continuation of the present commercial modus vivendi between the United States and Turkey beyond April 10, 1929, until such time as an accord of a more permanent character shall have been concluded by the two Governments.
This question depends, of course, upon the date chosen for commencing the negotiation of a new Turco-American commercial convention. As yet I do not know what is in the mind of Tewfik Rushdi Bey in this connection and I have purposely avoided sounding him out, not wishing to convey the impression that we ourselves are eager to press the matter. It seems improbable, in any case, that the question of commencing negotiations will be broached until the new Turkish tariff shall have been enacted by the Grand National Assembly. This may take place during the late autumn but, in view of the considerable work involved, it appears more likely that the law will not be completed until winter or even spring. This, therefore, is the first uncertain element in the situation.
The second uncertain element, and one to be carefully appraised, is whether Tewfik Rushdi Bey will take the initiative with regard either to the extension of the modus vivendi or to the commencement of negotiations for a convention. The arguments in favor of and against his taking the initiative may be roughly calculated as follows:
Pro:
- (1)
- The Minister has said to me on previous occasions that Turkey is determined to preserve our commercial relations without interruption and that if the law should be found to stand in the way, the law could and would be altered.
- (2)
- The Minister has stated to my Italian colleague that he, Tewfik Rushdi Bey, is more interested in the forthcoming commercial negotiations with the United States and Italy than with any other countries. The reasons for this interest are obvious, as the statistics of trade between these countries readily indicate. It therefore appears not unlikely that the Minister may desire to negotiate commercial conventions with the United States and with Italy before commencing negotiations with the other Lausanne signatories, in order that these [Page 959] two treaties may serve as patterns for the others. If this were the case, he would no doubt broach the matter on his own initiative and at his own good time.
- (3)
- Since statistics show that the United States is the largest purchaser of Turkish commodities and also that the value of exports from Turkey to the United States is between three and four times as great as the value of imports from the United States into Turkey, it might be argued that an uninterrupted commercial agreement, whether on the basis of a modus vivendi or of a treaty, is of greater importance to Turkey than to the United States, and that this in itself might cause the Minister to take the initiative.
Con:
- (1)
- If the Turco-American commercial modus vivendi should lapse before the conclusion of a commercial convention, higher duties would by existing law automatically and immediately be imposed on American imports into Turkey. Yet in such a situation it does not appear that the President could or would apply to Turkish imports into the United States the provisions of Article 317 of the United States Tariff Act,40 first, because discrimination against American goods might not be involved and, second, because such a measure might not be found to be in accordance with the public interest. The American tobacco interests alone would doubtless have something to say on this subject. If the Turkish Government is aware of this situation, there might be no great incentive to induce Turkey to take the initiative in the matter under discussion. However, the importance of this point can better be appraised by the Department than by the Embassy.
- (2)
- In Turkey’s present chauvinistic frame of mind, she is not generally inclined to take the initiative in proposing such negotiations with western Powers. Hitherto she appears to have expected those Powers to take the first step. This might apply with even greater force to the United States on account of our failure to ratify the Treaty of Lausanne.
- (3)
- Two members of the Foreign Office who are interested in the forthcoming commercial negotiations have remarked that the law of April 10, 1927, would be strictly interpreted and enforced, rendering impossible the extension of any provisional commercial agreement beyond April 10, 1929, and they have recommended that the representatives of the interested countries should bring the matter to the attention of the Minister for Foreign Affairs with a view to having the provisions of Article I of the law amended or of enacting other legislation which would permit the continuation of existing commercial modi vivendi beyond that date. The officials referred to were Atif Riza Bey, until recently Chief of the Commercial Section of the Foreign Office, who spoke to Mr. Patterson last July (see my despatch No. 397 of July 25), and Shevki Bey, formerly Undersecretary of State for Foreign Affairs who still takes a part in commercial negotiations and who made a similar recommendation to Count Hochepied of the Netherlands Legation in August.
I do not personally attach great importance to any of these arguments so far as Tewfik Rushdi Bey is concerned and I am inclined to [Page 960] doubt whether his procedure will be guided by any carefully calculated analysis of the situation. If he desires to negotiate a commercial convention with the United States before commencing negotiations with the signatories of the allied Treaty of Lausanne, he will in all probability say so frankly on his own initiative. Even if he has no such plans in view, I am inclined to believe that his eagerness for negotiation, which he has often told me is his primary interest in life, may lead him to broach the matter when the time is ripe, presumably soon after the new Turkish tariff Law shall have been enacted.
For the present, in any case, I see no reason why I should take steps with a view to obtaining legislation which would permit the continuation of our modus vivendi beyond April 10, 1929. The new tariff law may conceivably be completed at any time late this autumn and for that reason I believe that I should be at my post from December first. I have therefore applied for simple leave of absence for two months from October 4, which, if granted, would ensure my return to Turkey at latest on December 2. If the law of April 10, 1927, shall not have been amended on the recommendation of other Powers before the middle of the winter, or if Tewfik Rushdi up to that time shall have said nothing to me concerning the commencement of negotiations for a commercial convention, it will then be time enough, in my opinion, to consider broaching the matter ourselves. When the Government desires action by the Assembly, it can obtain it in short order.
In the meantime, permit me to suggest that the Department have in mind for eventual instructions the following points:
- 1.
- Is it desired that the commercial relations between the United States and Turkey be continued under the existing or a similar modus vivendi, or
- 2.
- Does the Department consider the regularization of our commercial relations with Turkey in a more permanent form desirable?
- 3.
- If the Department considers that the regularization of our commercial relations with Turkey in a more permanent form is desirable, does the Department prefer the negotiation of a Commercial Treaty, or merely the negotiation of an agreement effected by exchange of notes according Mutual Unconditional Most-Favored-Nation Treatment in Customs Matters?
The Commercial Attaché of the Embassy, Mr. Gillespie, and the Consul, Mr. Allen, inform me that they concur in all of the foregoing views.
Respectfully awaiting the Department’s further instructions in this connection,
I have [etc.]